KIGALI - The Government has announced that it has waived all import duties on diesel as fuel prices continue to rise. This was disclosed by the State Minister for Industry and Investment Promotion, Vincent Karega.

According to a mini survey conducted in Kigali City, pump prices for petrol and diesel this week increased from Frw799 to Frw892. Kerosene increased from Frw721 to Frw814.

The hikes have been blamed on the increase in oil prices worldwide, and the Government’s move to guarantee a 100 percent duty-free diesel imports is one of the immediate efforts to avert a possible crisis. Fuel dealers have since been paying a 2 percent tax on diesel.

Karega said in an interview that the increase in subsidies was necessary to keep the prices under check since diesel demand is increasingly growing compared to other fuel products like petrol and kerosene.

"Diesel is used for lighting (generating power), running industries as well as heavy vehicles,” Karega said.

He added that if not highly subsidized, diesel pump prices could skyrocket, thereby forcing prices of essential commodities to go high and thus affecting the entire economy. However, the national revenue officials are wary of the development.

Rwanda Revenue Authority (RRA) Deputy Commissioner General, Eugene Torero, said the waiver will lower Government revenue from imports, but hastened to add:

"The increase is a necessary evil  since fuel is pivotal to the economy.” 

Subsidies on petrol have dropped to 72 percent from 98 percent, while kerosene has no subsidies as its taxes are already low (5 percent).

"But the Government is proposing to subsidize kerosene since it’s largely used by Rwandans for lighting and cooking, now that charcoal and cooking gas are expensive,” Karega explained.

He added that petrol subsidies have dropped because its price on the international market has not significantly increased compared to diesel prices.

In the United Kingdom for example, the average price of a litre of petrol is now at about £1.14 (Frw1,198), while diesel prices have risen to an average of about £1.26 (Frw1, 325) per litre.

The price of oil recently hit a record high - above $135 a barrel (117 litres) on the international market – more than twice its cost a year ago.

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